India

India Interest Rate

India Interest Rate

RBI Repurchase Rate in India

India's monetary policy from 2013 to 2022 was generally characterized by gradual rate cuts to support economic growth and manage inflation. The Reserve Bank of India (RBI) cut rates significantly during the COVID-19 pandemic to stimulate the economy. However, the RBI then hiked rates in 2022 to tame price pressures and support the rupee.

The RBI Repurchase Rate ended 2022 at 6.50%, up from the 4.00% end-2021 value and down from the reading of 8.00% a decade earlier. For reference, the average policy rate in the Asia-Pacific region was 3.70% at end-2022. For more interest rate information, visit our dedicated page.

India Interest Rate Chart

Note: This chart displays Standing Lending Facility Rate (%, eop) for India from 2018 to 2014.
Source: Reserve Bank of India.

India Interest Rate Data

2018 2019 2020 2021 2022
RBI Repurchase Rate (%, eop) 6.25 4.40 4.00 4.00 6.50
10-Year Bond Yield (%, eop) 7.35 6.14 6.18 6.84 7.31

RBI stands pat for seventh consecutive meeting in April

On 5 April, the Reserve Bank of India (RBI) left the policy repo rate unchanged at 6.50% for the seventh meeting running, as expected by the market. It also left its standing deposit facility and marginal standing facility rates unchanged at 6.25% and 6.75%, respectively. Five board members voted for the decision, while one voted for a 25 basis point cut.

In explaining its decision, the RBI noted that food price pressures—fueled by adverse weather—are “interrupting” the return of inflation to its medium-term inflation target of 4.0%. The RBI also pointed to the upside risks to the inflation outlook posed by geopolitical tensions in justifying its move due to their potential impact on trade and commodity prices. The RBI said that it expects inflation to average 4.5% and GDP growth to average 7.0% in the fiscal year starting in April, unchanged from the projections at its last meeting in February.

The RBI said it would keep its policy stance focused on the “withdrawal of accommodation”, maintaining a hawkish tone. The Consensus is for the RBI to begin lowering the policy repo rate in July–September this year. The RBI’s next meeting is due on 5–7 June.

Analysts at Nomura said: “We expect the first cut in August […]. Inflation is already aligning closer to the 4% target; core has undershot 4%; repeated supply shocks have not resulted in any generalization […]. We expect 100bp in cumulative cuts in FY25.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Indian interest rate projections for the next ten years from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Indian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Indian interest rate projections.

Want to get access to the full dataset of Indian interest rate forecasts? Send an email to info@focus-economics.com.

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